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July 08, 2013 at 09:40 PM
Investors across the world who are either already in Iraq or thinking about the many investment opportunities that exist in the war-ravaged nation have welcomed the news of Citigroup’s plan to open a branch office in Baghdad that will support its corporate customers and facilitate financial transactions.
Citi will be the first American lender in Iraq and its presence on the ground will make things a great deal easier for foreigners doing business in Iraq, says Rene Fijen, founder of Dutch transport safety firm Fijen BV, which has been active in the autonomous Iraqi region of Kurdistan for two years now.
“Having a large international bank like Citi on the ground is a great step forward for Iraq and for investors here, because it’s going to make it that much easier to get money in and out of a country where financial transactions are not easy, but where there’s a lot to be done,” according to Fijen. “Investors can now feel more confident that through a Citi, their transactions will be executed according to international standards.”
Fijen said Citi will expand beyond Baghdad to open offices in places like war-battered Basra in the South of Iraq, and Erbil, the Kurdistani capital, which is rife with opportunity. Fijen’s firm, in fact, has teamed up with Dutch public transport company GBV to bring bus lines to Erbil and Suleimani, Kurdistan’s other principal city.
According to The International Monetary Fund (IMF), Iraq’s economy is slated to grow by 9% this year and the Iraqi government plans to increase its budget spending by a hefty 18% to $118 billion this year. Many investors, however, are still leery of committing to the country.
“Iraq is increasingly getting attention but the lack of custody has not led to much follow through investment, so it’s still a story waiting to happen,” said Daniel Broby, CIO of London boutique investment firm, Silk Invest.
Kurdistan, on the other hand, is quite attractive, Broby said. The autonomous region is rich in natural resources, for one, with sizeable oil reserves (very soon, Kurdistan will begin exporting oil to Turkey). But more importantly, Kurdistan is a lot more politically stable than Iraq, Broby said, which makes it all the more attractive for foreign investors.
Fijen attributes that stability to the region’s history.
